A Short Post on Salary Caps and Baseball

by R.J. Anderson on Dec 29, 2008 8:58 PM EST Comment 21 comments

Lately there's been a lot of talk about salary caps and baseball. Driven largely due to the Yankees free agent spending spree in which they added CC Sabathia, A.J. Burnett, and Mark Teixeira for some large sum that most of us will never come close to earning. Most of you know I'm a Rays fan, and those of whom have talked to me about the topic before know I'm largely against implementing a salary cap.

No matter whether there's a floor, a cap, or simply a free market, teams like the Yankees will always earn more revenue per victory than teams like the Rays and Marlins. Right now, the Yankees use their financial advantages to sign free agents to massive, albeit market value, contracts that smaller market teams have no hope of offering. That being said, free agent contracts are only a good deal when compared to other free agent contracts.

If a cap is implemented, the Yankees will still earn a ton of revenue, but will have an excess amount of cash laying around that used to be spent on their roster. Odds are, they're going to spend that money, and on what? Well, how about amateur talent, both domestically and internationally or technology and advancements in statistical analysis as well as scouting, coaching, and front office techniques?

What would you rather have: the Yankees of current, who spend money on free agents that are usually near the end of their prime anyways, or the Yankees of a salary capped world, who have a distinct advantage in minor league talent and baseball operations?

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Hmm... depends...

Do they still suck?

Clutch: A measurement of how much better or worse a player does in high leverage situations than he would have done in a context neutral environment. http://www.fangraphs.com/blogs/index.php/glossary/

by bs.uf15bosox9bears23 on Dec 29, 2008 9:04 PM EST reply actions 0 recs

Most likely not.

by R.J. Anderson on Dec 29, 2008 9:08 PM EST up reply actions 0 recs

Greater revenue sharing is the key

That would help level the playing field. If the vast majority of revenues were shared and then a salary cap amount were tied to a percentage of those revenues, then it wouldn’t screw the players out of their rightful share of the billions that MLB teams rake in. Greater revenue sharing is the key to address the current competitive imbalance.

The immoderate moderator

by NYRoyal on Dec 29, 2008 9:12 PM EST reply actions 0 recs

Possibly so

But how do you get the big market owners to agree to it? At the minimum you’re talking major, major compensation to owners in NY and LA.

And is there a plan that all the owners would buy into that the players would also go for?

Everyone has seemed to buy into the concept of a rising tide lifting all boats recently, but we’re not that far removed from both the owners and union treating their relationship like a zero-sum game.

I think any proposal that either side views as too drastic could really shake the basis of the relative stability we’ve had.

by Dan Turkenkopf on Dec 29, 2008 10:19 PM EST up reply actions 0 recs

I don't know if they'd ever agree to it

But I didn’t think they’d agree to the revenue sharing they currently have. So maybe some degree of increase is possible. Certainly a drastic change is not going to be accepted.

The immoderate moderator

by NYRoyal on Dec 30, 2008 8:05 PM EST up reply actions 0 recs

Nothing will change

Until teams use the kickbacks from the luxury tax either in better free agent signings (I’m looking at you Dayton Moore…) or spending that money in the draft by going over slot (I’m looking at you Jim Bowden). Having a cap doesn’t change those facts.

by Mike Rogers on Dec 29, 2008 10:04 PM EST reply actions 0 recs

I'm a Royals fan

so I would love DM to get better free agents. However, this can’t be regulated because whatever is a “good” free agent is fiercely debated. However, it is completely fair to require teams receiving payments to actually invest it in the team.

However, please tell me where I can find the data on what payments a team actually receives from the luxury tax. I think that NY fans assume it is more money than it actually is. Is the current payment enough to even be helpful?

I AM intangible!

by kabrink on Jan 3, 2009 1:33 PM EST up reply actions 0 recs

For all you Yankee Haters

I’m with you, I’m not a fan either. Buutttttt, I really don’t have a problem with the Yankees gobbling up all the top talent. First of all, they generally can’t sign THIS many good players all at once, it was just a combination of good circumstances (shedding Giambi’s 25m/season, Abreu’s Salary, etc.) and a declining economy (making for less competitors). While the Yankees probably just bought themselves a playoff ticket, this doesn’t mean that these contracts are guaranteed. For every A Rod contract (player performs well throughout said contract), there is at least one or more Kevin Brown contract (good player sucks after signing).

Plus, while I think the MLB regular season is the best regular season in all of sports (you tend to weed out contenders from pretenders in 162 games), I am not a fan of the playoffs. It’s not a 100% crapshoot, as better teams do get a slight edge in the playoffs, but it’s not nearly as much as other sports (like the NBA, where the top few teams are the only ones with a real chance). For all the Yankees big signings, they can never guarantee themselves that vaunted WS Trophy, and thus makes me not worry so much about what they’re doing as much as I worry about what my team is (or isn’t, at this point) doing.

"I'm on hold for now"- Bobby Crosby

by DyeLongJustice on Dec 29, 2008 11:26 PM EST reply actions 0 recs

Playoffs should be fixed before we get a salery cap

This is the point I take out of that comment:

I don’t care if the Yankees win their division and go on to win the WS. They’ll have earned it. Their fans spent a huge ton of money attending games, buying crap, etc. The team took that money, spent it on good players, and those said players end up giving their fans their money’s worth. There is no fundamental problem with this.

What I would have a hard time living with is if the team IS NOT the best team in the league. If they just mess around, and look stupid for only winning 89 games on a $250 salery, but end up making the playoffs in a crap shot, now THAT would say that there is a fundamental problem in the sport of baseball.

The stock market will never recover, our armies will never again be #1, and our children will drink filthy water for the rest of their lives - HST

by the fix is in on Dec 31, 2008 1:15 PM EST up reply actions 0 recs

This is the same argument Max Kellerman makes

and I think it is a terrible one. If the fact that they have a lot of fans is a good reason for them to win the World Series, then why even play the games? Why doesn’t mlb.com just have a “Who do you want to win the World Series?” poll and just let fans vote like they do for the All-Star game? The tagline for the poll could even be, “This time it really counts!”

I’m not saying that a salary cap is necessarily the best thing for the game, but I think your argument is fundamentally flawed. Not to mention the fact that the Yankees receive a crapload of money from the taxpayers of New York City (many of whom are not Yankees or even baseball fans).

"The NY Mets are my favorite squadron" -- Apu Nahasapeemapetilon

by jessef on Dec 31, 2008 1:47 PM EST up reply actions 0 recs

by the way

my disagreement is with dyelongjustice, not the fix is in . . . (i think).

"The NY Mets are my favorite squadron" -- Apu Nahasapeemapetilon

by jessef on Dec 31, 2008 1:50 PM EST up reply actions 0 recs

A salary CAP wouldn't work

But how about a salary floor? Establish a minimum annual payroll. It doesn’t punish the big clubs, but instead assists the smaller ones. This would ensure the Marlins and Rays of the league don’t have to completely disband after building a successful young teams. While it shouldn’t be enough to pay for Longoria, Upton, Shields, Kazmir, etc, the floor should ensure two or three key pieces be held onto.
Say each team was guaranteed $50 or 60 million per year, divided between the team’s revenue and some sort of league revenue sharing system. This props up the small clubs without harming the big ones.

Would there be any inherent flaws in such a system?

by Willl on Dec 29, 2008 11:54 PM EST reply actions 0 recs

There are better things to invest money in than free agents

a salary floor can be harmful too

by JI on Dec 30, 2008 12:12 AM EST up reply actions 0 recs

It would lead to some awful contracts.

by R.J. Anderson on Dec 30, 2008 12:24 AM EST up reply actions 0 recs

Longoria, Kazmir, and Shields signed extensions within the last year.

by R.J. Anderson on Dec 30, 2008 12:23 AM EST up reply actions 0 recs

it depends

it would be dumb if it’s just limited to major league FAs, but if it works to something like…

All teams’ average spending over 3 year on baseball related personals must not be lower than the average money it recieved from revenue sharing during that span.
  baseball related people includes players / coaches / trainers/ scouts / statistical people

  money includes signing bonuses (which includes amature talents)/ salaires / posting fees / funds or equipments directly related to baseball operations.

    Something to this effect, might work.

    Then again, as long as there are gigantic faggots like Jeffery Loria owning baseball teams, this is pretty pointless too.

by RollingWave on Dec 30, 2008 1:13 AM EST up reply actions 0 recs

Terrible contracts

But I think owners should be forced to reinvest at least what they get in revenue sharing. Otherwise it’s just like stealing.

by kensai on Jan 1, 2009 3:20 AM EST up reply actions 0 recs

That's an absolutely awful argument

You’re opposed to a salary cap for the sole reason that it might “wake up” the Yankees?

Hello? What’s to stop them from “waking up” under the current system? The franchise could basically purchase the Dominican Republic if it wanted to. Nothing— nothing whatsoever— prevents it. In point of fact, the Yankees routinely are at or near the top of baseball in amateur expenditures as it is.

I’m not used to seeing such transparently feeble arguments proffered on this site.

Your 2008 Athletics: It's Nothing Personal.

by PaulThomas on Dec 30, 2008 5:17 AM EST reply actions 1 recs

If the yankees were spending their money to its best effect every season,

how do you explain their terrible farm system and their playoff misses? The obvious fact is that despite their spending, they are not the best team.

Space.

It's a problem we face.

So we never go anywhere.

We just stay in one place.

by hazel on Dec 30, 2008 9:08 AM EST up reply actions 0 recs

Why awful?

If you put a salary cap of 100 million in, then the Yankees have 100 million MORE to burn.

Where do you think they spend it? I’m guessing amateur talent. Think their international spending is scary now? Check it after a hard salary cap. It’ll be a joke.

As it is, they cannot buy the Dominican Republic, so to speak. They have money, but they obviously don’t want to operate hundreds of millions in the red. Jesus.

by kensai on Jan 1, 2009 3:14 AM EST up reply actions 0 recs

I say two things should do it.

No more than 2 type A FA can be signed in one year by any one team (meaning, of course, that Elias must limit A rankings to 60 per year, which is hardly unreasonable).

This should have the extra bonus of franchises pressuring Elias to rationalize their rankings. Also, it should not depress salaries that much, as there are enough big-market teams competing for top FAs and most don’t sign more than 2 per year anyway.

An MLB revenue sharing fund will pay 20% of the contract of any unrestricted FA who stays with his former team.

That should have the effect of increasing revenue across the board, since fans will support franchise players who give the team identity more than mercenaries.

by JobiJoba on Dec 31, 2008 12:08 AM EST reply actions 0 recs